Obamacare in court... again. Supreme Court to hear challenge

The Supreme Court will examine whether millions of Americans can continue to receive subsidies that are crucial to the goal of President Obama's health care law providing universal coverage.

By
Ken Guggenheim, Associated Press /
March 3, 2015

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The Supreme Court Building is shown Sept. 18, 2014, in Washington.

Carolyn Kaster/AP/File

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Washington

President Barack Obama's health care overhaul has survived a barrage of Republican-led repeal votes and, barely, a Supreme Court challenge to its constitutionality. Now it's back before the high court facing another line of attack. If Obama loses, many Americans could end up without insurance.

The court will examine whether millions of people can continue to receive subsidies that are crucial to the program's goal of providing universal coverage. Opponents say the wording of the law, written by Democrats when they controlled Congress, effectively bars the subsidies for residents of most states. The administration denies that. The nine justices will hear arguments Wednesday.

If the court rules against Obama, it could undermine a program that has slashed the number of uninsured Americans and will be central to the president's legacy. Republicans despise the law. They claim it infringes on individual liberties by requiring almost everyone to have insurance and results in Americans paying more and getting shoddy care.

America has never had a national health insurance, though there have long been federal insurance programs for the poor, elderly and military veterans. Many Americans get coverage through their employers.

For everyone else, the law, known as the Affordable Care Act, sought to drive down the often-exorbitant costs of private insurance. It encouraged states to set up insurance marketplaces, or exchanges. The idea was that consumers could obtain better rates through these exchanges than they would have on their own. Lower- and middle-income residents who didn't qualify for Medicaid, the program for the poor, could receive federal subsidies in the form of tax credits to offset insurance costs.

But most states did not create exchanges. Leaders in Republican states were loath to go along with what they deride as "Obamacare." In states without exchanges, residents had to use a backstop — a federal insurance market that got off to a notoriously bungled start because of computer woes.

The federal exchange is a supersized version of the states' and participants have been considered eligible for subsidies. Opponents though, say they shouldn't be. They note that part of the law dealing with subsidies refers specifically to exchanges "established by the state."

The administration says that's absurd — that the full law makes clear there is no such distinction between federal and state exchanges and Democrats would not intentionally undermine their own program. But with Republicans controlling Congress, Democrats have little hope of tweaking the language.

So far, courts have been split on the issue. A three-judge panel in Richmond, Virginia, unanimously sided with the administration in the case that will be heard Wednesday. In a similar case, another appellate panel voted 2-1 against the administration. That ruling was later tossed out and the case is on hold pending the outcome of theSupreme Court case.

The Supreme Court has heard previous challenges to the Affordable Care Act. In 2012, it voted 5-4 to uphold its constitutionality. But last year, the court ruled against Obama in determining that businesses with religious objections don't have to pay for contraceptives under their health plans.

A ruling is expected in June. Republicans would rejoice if the court decides against Obama, but this could prove to be a Pyrrhic victory. The state-run exchanges, which would be safe, tend to be on Democratic turf. Most of the estimated 8 million people at risk of losing subsidies live in Republican states or "swing states" that shift between Republicans and Democrats.

That would put pressure on Republicans to do something to ease the impact of the ruling — and quickly. Of the 24 Republican senators facing re-election next year, 22 are in states where residents could lose subsidies. Residents of pivotal states in the 2016 presidential race, such as Ohio and Florida, also rely on the federal exchange. Democrats would gleefully remind voters which party they should blame if their health costs soar.